McCall v. Herring

• Decision Date: 08 August 1902
• Citation: 42 S.E. 468,116 Ga. 235
• Parties: McCALL v. HERRING.
• Court: Georgia Supreme Court

42 S.E. 468

116 Ga. 235

McCALL v. HERRING.

Supreme Court of Georgia

August 8, 1902

Syllabus by the Court.

1. When a plea to an action has been duly and regularly filed, or an amendment thereto allowed and filed, such plea or amendment becomes a part of the record of the case, and, although afterwards a demurrer to the plea as amended is sustained and the same stricken, if it be sought to review the ruling striking the same it is not necessary that such plea be set out in the bill of exceptions. It can properly be incorporated as a part of the record in the transcript which is made and certified by the clerk. The motion to dismiss is overruled.

2. In an action in which only the establishment of a special lien on specific property is sought, and no judgment in personam is prayed against the defendant, a plea to the effect that the defendant has been adjudicated a bankrupt presents no defense to the action.

3. The taking of interest at the highest legal rate, in advance, by way of discount on short loans, in the ordinary course of business, is not usurious; but a reservation of interest in advance, in an ordinary transaction of lending and borrowing money, for a period of five years, is usurious when the amount reserved and the amount contracted to be paid aggregate a sum which is in excess of the highest legal rate for the term of the loan.

4. The statements of fact made in the plea, which by the demurrer are admitted to be true, are sufficient to make a good plea of usury. The trial judge, therefore, erred in sustaining a demurrer to this part of the plea, and in directing a verdict for the plaintiff.

Error from city court of Atlanta; H. M. Reid, Judge.

Action by E. S. Herring against J. K. McCall. Judgment for plaintiff, and defendant brings error. Reversed.

O. E. & M. C. Horton, for plaintiff in error.

John M Graham and E. M. & G. F. Mitchell, for defendant in error.

LITTLE J.

Elizabeth S. Herring instituted an action in the city court of Atlanta against J. K. McCall. Originally she sought both to recover a judgment on a promissory note, and also to establish a lien in her favor against certain land which she alleged had been conveyed to her, at the time of the execution of the note, to secure its payment. By amendment, the plaintiff alleged that the defendant had filed a petition in the district court of the United States for the Northern district of Georgia, to be adjudicated a bankrupt, and thereafter prayed said court to enjoin the plaintiff from prosecuting her suit; that such application for injunction resulted in an order allowing the plaintiff to prosecute her suit for the purpose of obtaining a special judgment, and having her lien fixed against the property described in the deed, but staying the suit in so far as it sought to obtain a general judgment against the defendant. The plaintiff then struck her prayer for a general judgment, and prayed only for a special judgment fixing her lien for the amounts alleged to be due. The defendant answered, admitting the execution of the deed, but alleging that the same was void because the note which it was given to secure was infected with usury. He also averred that he had filed his petition in bankruptcy and been adjudicated a bankrupt; that the property described in the deed had been scheduled in his petition in bankruptcy; and that the plaintiff's debt was one against which a discharge in bankruptcy would be good; and he set up the bankruptcy proceedings as a defense against the debt. The averments of the plea in relation to the defense of usury set out in detail the facts on which the defendant relied to show that the debt was infected with usury, which will hereafter be specifically referred to. The plaintiff demurred to the answer and plea on a number of grounds, among others, that it set forth no legal defense, and failed to show usury; that it does not appear by the answer that the lender retained or received or shared in the $80 retained as commissions; and that those parts of the answer which set up the bankruptcy of the defendant were insufficient as a defense to the action and irrelevant. A hearing was had on the demurrer, and the answer of the defendant was stricken, and by direction of the court the jury returned a verdict setting up and establishing a lien in favor of the plaintiff, on the land described in the petition, for the amount claimed thereon, together with attorney's fees and interest. The defendant excepted to the ruling of the court in sustaining the demurrer and striking his answer, and also in directing the verdict which was rendered.

1. When the case was called in this court, a motion was filed to dismiss the writ of error on two grounds: First, that the plea, having been stricken from the files, is not properly a part of the record, and should therefore have been incorporated in the bill of exceptions, and not sent up by the clerk as a part of the transcript of the record; second, that there was no sufficient assignment of error, that the assignments in relation to striking the plea could not be understood without the plea, and the other assignments were not specific, and do not point out the errors complained of. It is sufficient to say, in regard to the second of these grounds of the motion to dismiss, that it is without merit. The trial judge directed a verdict, and the bill of exceptions alleges that the court erred in so doing. This was a sufficient assignment of error to call in question the correctness of such direction, and, as we shall presently see that the stricken plea was a part of the record, there is no merit in the complaint that there was no sufficient assignment of error.

We are well aware that it has been ruled in several other states that when a plea or answer has been stricken the effect is to take such plea or answer out of the record; that, in order to be considered by a reviewing court, it must come up in the bill of exceptions; and that sending it up as a part of the record, by the clerk of the trial court, does not make it such. See 2 Cycl. Law & Proc. 1059; Halpern v. Spencer (Ark.) 47 S.W. 637; Pelham v. Page, 6 Ark. 535; Harness v. Ross, 13 Ind.App. 575, 41 N.E. 1065; Fry v. Leslie, 87 Va. 269, 12 S.E. 671; and cases cited in 3 Cent. Dig. 107, § 2352, under title "Appeal and Error." On the other hand, it was ruled in the case of Whiting v. Fuller, 22 Ill. 33, that "an affidavit of merits to a plea is a part of the plea, and is preserved in the record without a bill of exceptions. This is the case, also, where a plea is stricken from the files." In the case of Abbott v. Douglass, 28 Cal. 295, it was ruled that "an answer, notwithstanding an order to strike it out, is still entitled to its place in the judgment roll." In Davis v. Water Co. (Cal.) 33 P. 270, it was also ruled that "a demurrer, though stricken out, constitutes a part of the judgment roll." If the effect of dismissing a plea on demurrer is to take it out of the record, the same result would follow in case the petition was dismissed on demurrer; and while, perhaps, there is no adjudicated case in which this court has been called on to rule the question directly, it has not infrequently recognized a petition dismissed on demurrer as a part of the record; thus tacitly, at least, indorsing the view taken in the Illinois and California cases cited supra. It seems that the rulings of those courts are founded on the better reasoning. In the case of Sibley v. Association, 87 Ga. 738, 13 S.E. 838, it was ruled that "an amendment to the declaration, which was offered at the time of hearing a demurrer to the declaration, and disallowed by the court, is no part of the record, and can only come to the supreme court by being set out in the bill of exceptions, or annexed to the same as an exhibit duly authenticated." As the reason for this ruling, Chief Justice Bleckley said, in the course of his opinion delivered in that case, that the "amendment did not become a part of the record so as to be authenticated by the clerk's certificate, and its contents are not set out in the bill of exceptions, nor in any copy of it annexed to the bill as an exhibit, or otherwise duly authenticated by the presiding judge. For this reason, although the record as sent up by the clerk is accompanied by what purports to be an amendment without any mark of filing upon it, we do not consider it as properly before us." This ruling is not only sound, but certainly the principle on which it is based does not conflict with that on which the California and Illinois cases were ruled. The amendment in the Sibley Case, just cited, never became a part of the record of the case; it was offered, but not allowed, by the judgment of the court; had it been, it would have become a part of the record. Having become such, it is difficult for us to perceive how a subsequent ruling that such plea or amendment sets up no defense to the action has the effect of devesting it of its character as a plea of record. It is, under such circumstances, not physically taken from the files, nor separated from the other pleadings in the case. Having been allowed and filed, the question whether it contains matter good in defense cannot divorce it from the record. The motion to dismiss the writ of error must therefore be denied on each of the grounds on which it was predicated.

2. The trial judge did not err in striking, on demurrer, so much of the plea as set up the facts that the defendant had been adjudicated a bankrupt, that the debt sued on was one provable in bankruptcy, and that the property described in the deed, which the plaintiff held as security for her debt had been placed in his schedule of assets on file in the bankrupt court. These facts did not bar the right of the plaintiff to assert...